The circulars restricting District Central Co-operative Banks from accepting specified bank notes during demonetisation were lawful and did not violate statutory provisions, ensuring financial integrity.

JUDGMENT :

Pushpendra Singh Bhati, J.

1. At the outset, it is clarified that the instant D.B. Civil Writ Petition No. 3331/2017 (Dudhu Gram Seva Sahakari Samiti Ltd. vs. Union of India & Ors.) along with the connected D.B. Civil Writ Petition Nos. 3272/2017, 3273/2017, 3274/2017, 3276/2017, 3286/2017 and 3328/2017 arise out of identical facts and circumstances. The issues involved, the challenge laid, and the reliefs claimed in all the writ petitions being similar in nature, the same are being decided by this common judgment. For the sake of convenience and to avoid repetition D.B. Civil Writ Petition No. 3331/2017 (Dudhu Gram Seva Sahakari Samiti Ltd. vs. Union of India & Ors.) is taken as the lead case, and the decision rendered herein shall govern the remaining connected matters as well.

1.1. The present D.B. Civil Writ Petition No. 3331/2017 has been preferred claiming the following reliefs:

“It is, therefore, humbly and respectfully prayed that this writ petition may kindly be allowed and by an appropriate writ, order or direction:

a. The circulars dated 14/11/2016 and 17/11/2016 (Annexures-6 & 7), so far it prohibit the District Central Co-operative Bank from accepting deposits of specified Bank Notes i.e., Rs.500/- and Rs.1000/-, may kindly be quashed and set aside after declaring it illegal and ultravires of the Reserve Bank of India Act-1934, and it is further prayed that, RBI may kindly be directed to accept deposit of SBN of Rs.16,17,500/- available in the petitioner society.

b. Without prejudice to above prayer, it is further prayed that if the Hon’ble Court comes to the conclusion that RBI has not authorised the DCCB or PACS from accepting specified bank notes vide the notification dated 08/11/2016 or circular dated 08/11/2016 then, it is humbly prayed that the notification dated 08/11/2016 and the circular dated 08/11/2016 (Annexures-02 & 03) may kindly be declared illegal and ultravires so far it not included the District Central Co-operative Banks and PACS for accepting deposit of specified Bank note of Rs. 500/- & 1000/-.

c. The respondent NABARD may kindly be directed to scrutinise the SBN available in the petitioner-society and it may kindly be further directed to make arrangement for legal disposal of SBN available in the society so that society may not face financial loss.

d. Any other relief, which this Hon’ble Court may deem fit kindly be granted in favor of the petitioner and writ petition may kindly be allowed with cost.”

2. Brief and undisputed facts, as borne out from the record, are that the petitioner is a Primary Agricultural Credit Co-operative Society registered under the relevant Co-operative Societies Act and functions at the village level within the three-tier co-operative credit structure comprising Primary Agricultural Credit Societies, District Central Co-operative Banks and the Apex Co-operative Bank, with financial support and regulatory oversight by the National Bank for Agriculture and Rural Development.

2.1. The record reflects that on 08.11.2016, the Ministry of Finance, Department of Economic Affairs, Government of India issued a notification under Section 26 (2) of the Reserve Bank of India Act, 1934, declaring specified bank notes of denominations of Rs.500/- and Rs.1000/- to cease to be legal tender with effect from 09.11.2016, subject to the conditions stipulated therein.

2.2. It emerges from the pleadings that pursuant to the said notification, the Reserve Bank of India issued certain circulars on 08.11.2016, followed by further communications dated 14.11.2016 and 17.11.2016, regulating the manner in which specified bank notes could be accepted, deposited or exchanged by various categories of banks, including co-operative banks.

2.3. According to the petitioner, as on 08.11.2016, the petitioner- society was holding specified bank notes amounting to Rs.16,17,500/-, comprising denominations of Rs.500/- and Rs.1000/-, which had been received in the ordinary course of its functioning as a Pri